Revenue up 16% at S$837.4 million, driven by stronger project offtake

 

[SINGAPORE] Steel solutions provider BRC Asia reported a 5 per cent decrease in net profit for the second half of the year to S$52.2 million, from S$55 million in the year-ago period.

 

Revenue rose 16 per cent to S$837.4 million, from S$723.1 million in the year before. 

 

This was primarily driven by stronger project offtake in the second half, BRC Asia said on Sunday (Nov 23). 

 

&ldquo The growth was partially offset by lower selling prices due to falling steel prices during the period.&rdquo  

 

For the full year, net profit stood at S$94.3 million, 1 per cent higher than the S$93.5 million in the financial year ended Sep 30, 2024. Revenue rose 5 per cent to S$1.6 billion, from S$1.5 billion previously. 

 

Earnings per share on a full-year basis rose to S$0.3437, from S$0.3410 in FY2024. 

 

The board is proposing a final cash dividend of S$0.07, down from S$0.08 in 2024. 

 

It also declared a special dividend of S$0.07, up from S$0.06 last year. Including the S$0.06 interim dividend for 2025, this brings the total dividend to S$0.20. 

 

&ldquo The group&rsquo s strong S$1.9 billion sales order book, supported by major project wins including Changi Airport Terminal 5 substructure, continued to translate into deliveries and earnings, particularly in the second half of the year,&rdquo BRC Asia said. 

 

Looking ahead, the group said positive developments across both the public and private sectors continue to support domestic construction demand in Singapore in 2025. 

 

&ldquo In particular, the resumption of the multi-billion-dollar Changi Airport Terminal 5 project, following a pandemic-related pause, is expected to substantially lift construction activity over the coming years,&rdquo BRC Asia said.

 

The group continues to strengthen its overseas presence, including the acquisition of Southern Steel Mesh in Malaysia, which extends its presence in the country from the south to both the central and northern regions. 

 

Seah Kiin Peng, BRC Asia&rsquo s group chief executive officer, said: &ldquo We are encouraged to see positive progress in the growth of domestic construction offtake, which accelerated the conversion of our robust sales order book into deliveries and earnings in the second half of 2025, a trend we expect to continue into the next year.&rdquo  

Heidi Mo of UOB Kay Hian believes that steel supplier BRC Asia will continue to benefit from rising demand as construction activity accelerates.

 

Besides keeping her " buy" call, Mo, in her Sept 5, has raised her target price for this stock from $3.29 to $4.69. Just over three months ago, Mo' s price target for this counter was $2.76.

 

" Its record $2 billion orderbook, boosted by major wins like Changi Airport T5, provides strong multi-year earnings visibility.

 

" With favourable tailwinds, BRC Asia' s earnings momentum is expected to continue going into FY2026," says Mo, adding that this stock has a " decent" FY2026 yield of 5.3% as well.

 

According to Mo, BRC Asia commands a 55-60% market share in Singapore&rsquo s steel market, which makes it a prime proxy to benefit from rising construction activity.

 

Last month, it completed the acquisition of a 55% stake in Southern Steel Mesh (SSM), which operates four manufacturing plants in Malaysia producing welded wire mesh and reinforcement products.

 

" The acquisition provides BRC with a strategic foothold into Malaysia, diversifies its revenue and enhances its scale in Southeast Asia. Management aims to enhance value by upgrading SSM&rsquo s operations to better compete with other leading downstream steel manufacturers," says Mo.

 

She notes that the company, within Singapore, is enjoying tailwinds from major infrastructure spending and housing. Besides the airport' s Terminal 5 and various other MRT lines, there are some 9,755 private units to be launched this year and even more HDB flats.

 

All in, BRC Asia has built up a record order book of $2 billion, including a recent boost of $570 million for Terminal 5.

 

The orders are to be filled in five years although the majority is expected to be completed within the next three years, in line with the ongoing construction upcycle.

 

" This provides earnings visibility, cost advantage and improved procurement, positioning BRC to defend margins even in a volatile steel price environment.

 

" While execution risk remains, the large orderbook provides a solid foundation for the coming years, and underpins BRC&rsquo s ability to sustain growth," says Mo.

 

Her revised target price of $4.69 is based on a 14x FY2026 earnings, a valuation multiple that is +2SD above its long-term average mean. Previously, she was using 7.6x FY2025, the historical mean.

 

" The higher multiple reflects BRC&rsquo s strong positioning as the dominant player in Singapore&rsquo s steel market and a prime proxy to the ongoing construction upcycle, which should drive sustained earnings growth," says Mo.

Natalie Ong of CGS International has kept " add" call on steel supplier BRC Asia following higher 3QFY2025 earnings that was slightly ahead of her estimates.

 

With healthy industry fundamentals along with a high dividend payout of more than 6% that is sustainable through FY2027, Ong has raised her valuation multiple, thereby deriving a higher target price of $4.30, from $3.40 previously.

 

Selling prices dropped 14% in the quarter but volume and margins gained, implying benefits of economies of scale enjoyed by the company, says Ong.

 

She points out that BRC Asia holds a strong market position within Singapore, with its own management estimating a share of between 55 and 60%.

 

It is one of the two key suppliers providing steel for Housing Development Board (HBD) build-to-order (BTO) projects and one of the six major players supplying rebar in the Singapore market. Significant projects won recently include a $570 million order for the construction of the airport' s Terminal 5, which helps lift BRC Asia' s order book to $2 billion as at July.

 

Down the road, BRC Asia is to become bigger. It has completed the first phase of the acquisition of a related company Southern Steel Mesh.

 

" The acquisition, which the management believes is a value-unlocking play, will require updating SSM&rsquo s machinery and aligning SSM to best-in-class practices/benchmarks, putting SSM in a better position to compete with other major downstream steel manufacturers that have ageing machinery and dated technology," says Ong.

 

In his separate note, Yik Ban Chong of PhillipCapital has similarly raised his target price for the stockm, while keeping his " accumulate" call. From $3.40 earlier, he now rates this counter worth $4.10.

 

" With about 60% market share in steel rebar in Singapore, we believe BRC Asia can secure more contracts with the rising construction demand in Singapore," says Chong.

This brings company&rsquo s total outstanding sales order book to S$2 billion as at Jul 14

 

[SINGAPORE] BRC Asia : BEC 0% has secured around S$570 million worth of contracts for the Changi Airport Terminal 5 project, the company said on Monday (Jul 14).

 

This will bring the company&rsquo s total outstanding sales order book to S$2 billion as at Jul 14, and extend revenue visibility through to 2029, it said in a bourse filing.

 

Under the agreements, BRC Asia will supply steel reinforcement for the substructure of Terminal 5.

 

The contracts were awarded by the joint venture between the Singapore branch of China Communications Construction Company and Obayashi Singapore.

 

Participation in major domestic infrastructure projects reinforces the company&rsquo s market leadership, said BRC Asia.

 

The company remains confident in capturing a bigger piece of the pie as more public projects enter the tender pipeline, it added.

CGS International analyst Natalie Ong, who is taking over coverage on BRC Asia, is remaining positive on the steel company as its 1HFY2025 ended March 31 net profitstood at 53% of her full-year estimate.

 

For the six-month period, BRC Asia reported a net profit of $42.1 million, 9% higher y-o-y, due to favourable foreign exchange (forex) and derivative movements, which increased by $7.2 million and lower finance costs, which fell by $2.8 million.

 

However, revenue for the period fell by 6% y-o-y to $716 million on lower steel prices, but was offset by higher delivery tonnage, which Ong estimates to be 5% higher y-o-y.

 

BRC Asia&rsquo s order book also hit a new high of $1.5 billion as at March 31.

 

Ong also likes that the steel company delivered on its mergers and acquisitions (M& A) strategy with its proposed 55% stake acquisition of Southern Steel Mesh.

 

In April, Mainboard-listed BRC Asia announced that it entered into a conditional share purchase agreement with the Malaysian group for RM61.1 million or $18.2 million.

 

With the purchase, Ong estimates BRC will gain a 15% share within the Malaysian market, up from its previously &ldquo negligible&rdquo share from its manufacturing plant in Johor.

 

&ldquo Management believes that the acquisition of Southern Steel Mesh is a value-unlocking play, which will require updating Southern Steel Mesh&rsquo s machinery and aligning Southern Steel Mesh to best-in-class practices/ benchmarks, putting Southern Steel Mesh in a better position to compete with the other major downstream steel manufacturers that have ageing machinery and dated technology,&rdquo says Ong in her May 26 report.

 

The acquisition will be subject to an extraordinary general meeting (EGM), which is to be convened, as Southern Steel Berhad, the parent company of Southern Steel Mesh, is a subsidiary of BRC&rsquo s controlling shareholder, Green Esteel.

 

Ong has maintained her &ldquo add&rdquo call as she believes BRC Asia&rsquo s high dividend payout is sustainable for the FY2025 to FY2027 amid &ldquo healthy industrial fundamentals&rdquo .

 

The analyst has raised her earnings per share (EPS) estimates for the same period by 4.2% to 6.7% as she lowers her operating and finance expense estimates.

 

With her earnings revisions, Ong&rsquo s target price is increased to $3.40 from $2.70 previously. Her new target price is pegged to BRC Asia&rsquo s calendar year (CY) 2025 P/B of 1.9 times or 0.7 standard deviations from the company&rsquo s 20-year historical P/B.